Category: Blog

In the true spirit of Labor Day, I hope all of you take time to reflect on your work and still find time to relax. For today’s blog, I encourage you to take a look at the article, Small Public Adjusting Firm—Big Results. It is an inspiring story of one public adjuster who became a public adjuster after having built “his world around serving insurers.”

Clay Morrison is a public insurance adjuster who, in a former life, owned a restoration company. His largest customer was State Farm. Clay is now the president of Morrison & Morrison, Inc. His public adjusting office is based out of League City, Texas and similar, to many public adjusters, the business includes family—the “other” Morrison is Clay’s wife, Ruth, a Texas attorney and corporate counsel for the firm.

Morrison decided to become a public insurance adjuster when he was “urged” by one large insurance company to go against his ethical standards and change the way business was done. Morrison’s article, published in the NAPIA Summer Bulletin, details the closed door meeting he was invited into with an upper level claims manager who made a request for Morrison to help State Farm.

The request:

“We refer a lot of restoration business to you, and we need your help in rectifying the consumer’s entitlement mentality.”

Morrison declined State Farm’s request, but his very successful restoration business was quickly out of business.

Now, Morrison is a public insurance adjuster, member of the NAPIA board, Secretary of the Texas Association of Public Insurance Adjusters (TAPIA), FAPIA member, and a Windstorm Network certified umpire.

Morrison explains that even as a small operator of his own public adjusting firm, he found it very important and beneficial to be a member of professional educational programs. Morrison acknowledges the expense of being active in multiple associations, but explains his two reasons for going the extra mile and spending the extra dollar.

Number 1: “If you want to be successful in a field, you must associate yourself with people who are most successful in that field.”

Number 2: “If you endeavor to do something, you should strive to be the best.”

Two valuable points for all of us to consider as we enjoy this holiday weekend and our work.

If your home ever is damaged in a fire or a natural disaster, filing a home insurance claim probably won’t be an experience to which you’ll look forward.

When you’re already in a stressful situation, it’s important to avoid making costly mistakes while dealing with your insurer. Here are eight goofs to avoid after you experience property damage.

Don’t be too quick to clean up

Your first impulse may be to start cleanup and repairs immediately.

home insurance claims mistakesClay Morrison, a property loss consultant with Morrison & Morrison in League City, Texas, observes that in the wake of a fire, tornado or hurricane, “people end up with a pile of water-soaked or burned junk and they’re miserable. So their first instinct is to clean up.”

The problem, however, is that an insurance adjuster needs to come out, inspect everything and take photos. If you clean up too much or haul away large amounts of debris and household items, you’ll likely jeopardize your chance to prove the extent of the damage to your property.

Prevent further property damage

Even though you don’t want to clean up too much after a loss, you shouldn’t let the property languish before a claims adjuster surveys your damage. Depending on the type of incident and how many policyholders were impacted, that could take anywhere from a few days to as long as 60 days.

But don’t sit and let rain pour in.

Following a loss, policyholders are required to mitigate or prevent further property damage. This requirement is found in the “conditions” section of insurance policies, notes Anita Taff of Taff Claim Services Inc. in Marietta, Ga.

Put a tarp over your home or board up the property if that is feasible. If you can’t gain access to your residence because authorities won’t allow it, obtain a letter from the fire department or another city agency documenting the fact. Show an insurer the letter to demonstrate that you took reasonable steps to protect your home.

Protect receipts and photos

One big mistake homeowners make is failing to take “before” and “after” photos of their properties. Each year, make a written inventory of your belongings, take photographs and make a video of all the contents in your home, suggests the National Association of Public Insurance Adjusters, a group of property-loss experts that works exclusively for property owners. Be sure to store these images in a safe place outside your home.

Also, never give an insurance adjuster original photos and receipts. Supply copies or duplicates and then request a written confirmation that your insurer received the documents. This way, you’ll always have backup photos in case the insurer loses your paperwork or documentation.

Find a witness to the cause

Many frustrated homeowners have tried to get insurance claims processed on the strength of nothing more than their word. It might stand to reason that if your roof has been ripped off, the passing tornado caused it. But often the burden of proving the cause of damage still falls on the property owner.

Having a witness who can testify on your behalf can go a long way toward maximizing your insurance claims. “If a neighbor or someone who doesn’t live in your home can tell an insurer, ‘I saw a tornado hit that house,’ that’s going to be very important to the claims process,” says Morrison.

Stick to the facts

Avoid exaggerating your damage. Even if you think your insurance premiums are too high or you felt mistreated by your insurer in the past, don’t try to make up for it by padding your claim. Those actions are disasters in the making.

“I can’t tell you the number of clients who say, ‘You saved me from myself and I would’ve made a mess out of things because I’m not happy with the last claim my insurance company handled,'” says Taff.

“A good public adjuster will say, ‘Our job is to get you every benefit and everything you’re entitled to; but no more, and no less.'” Aside from being unethical, a false or padded claim can be denied and you could be canceled, she adds.

Don’t let a contractor negotiate your insurance claim

Some policyholders allow contractors to negotiate homeowner insurance claims directly with insurers. This takes you out of the loop and leaves you with no clear idea about the exact repair costs or terms proposed by either side.

It is important to stay in charge of your claims process, says Ron Reitz a public claims adjuster and president of Quality Claims Management Corp., based in San Diego.

“Generally when you have a loss you need to hire emergency services to help with something,” he says. “Whether it is removing flooding or drying out your property or bringing in temporary power, a lot of times these guys will have you sign a contract that gives them 100 percent of your insurance proceeds. They also will ask to negotiate your claim with the insurance company. Those are both big no-nos.”

A better strategy: Do the negotiating yourself, or hire a public adjuster. Here’s how to hire a public insurance adjuster after a disaster.

Don’t sign a release on your insurance claim

Reitz warns that people whose homes have been damaged by flood, fire, or natural disasters may be too overwhelmed and distracted to pay close attention to documents they are asked to sign by their insurers. That’s always a mistake. He advises you never to sign a release on your home insurance claim.

“Generally [the documents] say, ‘You accept this as a final settlement and release us from any and all claims related to this loss,'” he says. “You are not required to sign a release as part of the claims process. They owe you the money. Let’s just say you accepted $1,500 and you think [the damage] is minor. Then they start making repairs and say there is $8,000 in additional damages. If you signed a release, you just took away your right to go after the additional amount.”

Be cautious when cashing insurance checks

Reitz also says you should be very careful about cashing insurance checks marked “full and final settlement.” You don’t want to cut yourself off from claims payments to which you’re entitled.

In some states, such as California, it is illegal for an insurance company even to issue such a check, he notes.

Before you cash such a check, “send a letter to the insurance company,” he says. “Say, ‘I am not accepting this as the full and final payment but I am accepting it as the undisputed amount.’ Let’s say you have a $500,000 claim and they give you $50,000. You definitely want to use the $50,000 and then go back for the $450,000.”

Two weeks ago I was in Joplin, Missouri working onJoplin tornado claims. Joplin reminds me of a town copied directly from a Norman Rockwell painting. The people are genuine, the youth are respectful and I can tell that a handshake is a readily accepted form of transacting business. While the people of Joplin seem ready and willing to trust that their property insurance company has done the right thing for them following the devastating tornado that ripped their town apart in May, I found a much darker picture as I began to examine claims.

As my work on claims progressed, I began to notice some very disturbing trends on the Joplin tornado claims that no consumer seemed to be aware of.

The first problem I noticed is that every property I examined appeared to be underinsured. Underinsured means that the amount of insurance coverage selected by either the agent or the insured is not enough to cover the real cost of replacement. At first I thought this was an anomaly, but not only did it appear consistently, it appeared consistently with two companies in particular.

The next issue that I noticed was that all the estimates I examined from one company had made no allowance for overhead and profit. Overhead and profit is a markup allowance added to the bottom line of an insurance damage estimate to allow for the overhead and profit of a general contractor. Again, this phenomenon appeared on every estimate I examined that was written by the same insurance company.

Next, I noticed that sales tax was missing from Joplin tornado claims estimates by the same company who had omitted overhead and profit. Almost every city in America requires that business collect sales tax for their goods and services.

Finally, the unit pricing allowed in the estimates by several insurance companies appeared to extremely dated and much lower than I would have expected. I need to mention that the problems I noticed are prevalent with two insurers who are probably two of the largest insurers in Missouri.

I cannot tell you that every company has handled Joplin tornado claims in this fashion, but every estimate I examined was handled this way. Joplin seems to be recovering slowly, but I can imagine how many properties are underinsured, how many claims are missing overhead and profit, how many claim payments omitted sales tax, and how many folks are only now learning of these facts as they try to rebuild.

Time Running Out for Joplin tornado claims

Unfortunately Missouri has limited time frames to take formal action for any wrong doing, and at the same time most policies issued in Missouri specify that you must claim recoverable depreciation within 6 months or less in some circumstances. These two factors, combined with a truly catastrophic situation make for the perfect storm when it comes to the consumer losing in the end.

I suspect that a huge percentage of Joplin claims were handled as I have described above. If you have a loss from the Joplin tornado, I would strongly urge you to have a professional public insurance adjuster to examine your claim. Even if you were paid policy limits for your Joplin Tornado Claim, I suspect that you were not paid fully to replace your property even though your adjuster may have said that they have done everything they can.

It seems that just when you think you have addressed things properly, something else comes up that causes you to take notice. We recently posted advice on dealing with a home that was burned to the ground and what to expect from a fire loss regarding proving your damages. Following our post, a very vigilant blog follower who experienced what he considers to be a total loss from fire to his home, sent me a note reminding us of Texas

Statute 862.053 that reads as follows:

Sec.A862.053.AAFIRE INSURANCE: TOTAL LOSS OF REAL PROPERTY.(a) A fire insurance policy, in case of a total loss by fire of property insured, shall be held and considered to be a liquidated demand against the company for the full amount of such policy. This subsection does not apply to personal property.

(b) AAAn insurance company shall incorporate verbatim the provisions of Subsection (a) in each fire insurance policy issued as coverage on real property in this state.

(c) AAThe commissioner shall require compliance with this section.

Our last post was probably not very clear when we described a house that was burned to the ground. What we need to clarify is “what” is considered a “total loss” and who determines what a total loss is. We have had reports from the field of some people being paid in full for their policy limits and some being told that while the house is burned, the slab is still usable. The questions remain for us as to whether a usable slab causes the home to be considered a total loss and the statute does not seem to define it either.

We wanted to collect various opinions from some of the attorneys we work with and Sergio Leal with Merlin Law Group reviewed this statute and took the initiative to follow up by posting a blog dealing with how the courts have defined a total loss. Please view the following link to make your own assessments as to what might qualify you for a total loss.

If you have not been paid full policy limits for your burned down home, you may want to consider asking your insurance company about the above provision. We would like to hear from you on this topic as to whether you have been paid your policy limits. I want to give our blog follower all the credit for being vigilant enough to bring this to our attention.

Your home is gone, the insurer will have to pay the policy limits… Right?

I have been a public adjuster for many years and have seen just about every loss situation you can imagine. After seeing the wildfire damage in Bastrop, I could not help but envision the following story wildfire insurance claim unfolding….
These videos is a possible senario of Bastrop, Texas Wildfire Insurance Claim.

Wildfire Insurance Claim – Part 1

Bastrop Wildfire Insurance Claim – Part 2

I spent last week meeting with property owners in the Bastrop area who are dealing with the aftermath of the horrible fires that dealt a blow to not only their personal financial condition, but also to the hearts of those who live there. In several meetings I noticed how emotions would seem to overtake those who spoke about the ordeal. However, Bastrop citizens are like a lot like other small town Texans in that they choose to pick up a shovel and start rebuilding their lives. This blog post will help provide insurance policy claim information related to the Texas and Bastrop Wildfire insurance claims.

Although FEMA employees seem to outnumber the entire population of Bastrop right now, being self-sufficient Texans the Bastrop citizens seem to be taking the bull by the horns, cleaning up, and taking care of themselves. I wonder if FEMA has lacked in applicants for assistance in Bastrop, because I noticed the following link on my email–(http://www.fema.gov/news/newsrelease.fema?id=57985). The link seems to be encouraging people to sign up even if they are concerned that they may not qualify. Sorry FEMA, but being a native Texan I can tell you that we are not like other places, and you will find few of us sitting on the curb waiting for the federal government to rescue us. Witnessing the “pull yourself up by the bootstraps” mentality has been an inspiration to me over the last week.

With all the discussion of clean up and living assistance for those with damaged homes, two insurance policy conditions come to mind for me. The first policy condition I am referring to is called “debris removal”. Whether you know it or not, your insurance policy likely has a provision to cover removal of debris that is a result of this fire. This will typically cover the demolition and removal of the burned structures on your property and may cover some of the trees involved if they have fallen on, or affected the structure. The amount you are entitled to is typically 10% of your main dwelling coverage limit. So for example if you carried $200K on your home’s main structure, then you likely have access to $20,000 in order to clean up. While many well intentioned folks have gathered fellow church members and friends to get to work with shovels in hand, I have some good news and bad news.

The good news is that if you hire someone to perform debris removal and you have the coverage, the cost is likely covered and you are free to spend your time in other pursuits. The bad news is that if you do the work yourself, most policies have a clause that allows you only minimum wage or some other grossly minimal pay for your time. By doing the work yourself you are giving your insurer a break from what they justifiably owe you. My advice is to look at your policy carefully to see if you have debris removal coverage before doing any work. If you do, find a reputable local demolition contractor who can do the cleanup and let them get to work as soon as your insurer has inspected the property.

The second policy condition I am referring to is ALE or additional living expenses. This coverage is for the additional expenses you incur over and above your normal living expenses while out of your home. To be paid, these must be incurred and you are entitled to assume equal living conditions to what you had prior to the fire.

Additional items that are covered under this coverage can be the cost differential to eat out now that you cannot prepare food at home, any additional travel expenses you incur to travel longer distances to school and work, dry cleaning now that you cannot launder your own clothes and any other costs you incur as a result of being displaced from your home. Like other coverage, ALE usually has limited coverage amounts that are specified as a percentage of your dwelling policy limit or as an incurred time line to make repairs or rebuild. ALE limits are often 10% to 25% of your dwelling limit amount or up to 1 year incurred to rebuild or repair. Read your policy carefully and make sure that you understand this coverage before you end up blindsided and out of money to live.

Wildfire Insurance Claim

Your home is gone, the insurer will have to pay the policy limits… Right?

I have been a public adjuster for many years and have seen just about every loss situation you can imagine. After seeing the wildfire damage in Bastrop, I could not help but envision the following story wildfire insurance claim unfolding.

Your home was totally destroyed by the recent wildfires and even though your world is turned upside down, you do have some sense of confidence because at least you know you are insured well and have no doubt that a check for the full amount of your policy will be forthcoming quickly.

—————————————————–

Help with your Wildfire Insurance Claim

If you are in a tough insurance claim situation, concerned about where your claim is heading, or something just does not feel right call me and I will be happy to discuss your situation.

My name is Clay Morrison, I am a licensed public insurance adjuster and my toll free number is 866-723-5787. Call me and I will be the expert who looks out for your best interests!

—————————————————–

Filing for the Wildfire Insurance Claim

You have maintained “full” coverage in the amount of $200,000 for over 20 years now with your agent who is also your neighbor, and have never made a claim for a single item. You make a trip to your agent’s office who directs you to the claim tent set up at the nearby Grocery store parking lot. When you arrive at the claims tent, you are greeted by a very friendly soul who says they are the field supervisor, and immediately begins pulling up your information on the computer to assist you on your wildfire insurance claim.

They verify that you are in a known fire zone, possibly on the confirmed total loss list and that you are definitely covered for fire. With great enthusiasm you are presented with a check for $1,500.00. You are a little dumbfounded and tell the supervisor that your house is gone- what about the rest of my insurance coverage?

The supervisor states that an independent field adjuster will be contacting you to make an appointment to view the property and as soon as that is completed you will be receiving payment for your claim with no explanation what “payment” means. You question further, but you are assured that “we will take good care of you”.

Feeling somewhat upset but still holding onto the belief that you will be paid in full for your policy limit amount you wait in anticipation for the call from the independent field adjuster for your wildfire insurance claim. The field adjuster calls, makes the appointment and subsequently meets you at the site.

After a brief inspection and a few questions, you ask the adjuster for a card so that you can contact him with further questions and as it turns out, he is out of business cards. He tells you that he will turn in his report to the insurer and they will be in touch. There is no confirmation of payment or how much.

By this point you are not feeling as much confidence as you did a couple days ago when you contacted your agent on your wildfire insurance claim. However you are still certain that a check for $200,000 will be arriving as soon as the independent adjuster turns in his report. Numerous days pass and no check arrives.

Finally three weeks after the independent field adjuster inspected your home an envelope arrives, and with great excitement you tear it open to find a check for $105,500 enclosed with instructions that explain that your total loss amount was $145,500 and that they have withheld $40,500.00 in recoverable depreciation that you may be able to recover someday depending on certain circumstances.

At this moment, you immediately realize that there must be a mistake and head off to the claims tent where all this started only to discover there is no mistake and you will have to call an 800 number in order to enquire as to why the claim was so underpaid.

At this point you are in denial, this cannot be happening- certainly this is a mistake in the system and they will rectify it. After all isn’t that how insurance works? The insurer will have to pay the policy limits….Right?

The answer is a resounding NO!

Much to the dismay of policy holders in the Bastrop area, a burned to the ground home does not mean payment in full of your policy limits. When a disaster occurs and your property is completely destroyed it is up to you, the insured to demonstrate why the property insured was worth every dollar that you were insured for.

In Texas and many other places the insurer will only pay what you can prove the value of the home to be, regardless of how much insurance you carried. It is critical that you document your home properly in order to receive the full amount you may be owed under your policy. It is also critical that you perform this in a timely manner.

The longer it takes for your wildfire insurance claim, the more likely you are to end up shorted on the back end. Your insurer will utilize their adjuster to reconstruct your property on paper and if the total number that comes out of their software is lower than your policy limit that is what you will be paid. The moral of the story is to be prepared to reconstruct your property on paper to demonstrate the true value or find a professional to do it for you. What you receive for your wildfire insurance claim is up to you.

Texas Wildfires Insurance Claim

Much of central Texas is dealing with wild fires that are consuming thousands of acres and is destroying hundreds of homes. There is no escaping a wildfire in the hill country because the landscape is filled with combustible growth everywhere due to the drought that has haunted Texas for months now. The first priority of everyone in this area should be preservation of life, things can be replaced. However, when the smoke clears and you return to your property you need to be prepared for the following situations when dealing with your insurance claim.

Scenario 1: If your home or business is completely destroyed, you will need to file a Texas wildfire insurance claim. By filing a total loos fire insurance claim, this does not mean that your insurer will “total” your home and pay you the policy limits contained within your policy. Texas is not a “valued policy” state. Valued policy means that if your property is destroyed by a covered cause of loss, the face value of the policy is due to the insured. In Texas you will only be paid for what the replacement cost of the property is regardless of how much insurance you carried. You must be prepared to reconstruct the cost of replacing your property on paper and demonstrate what the true replacement value is to your insurer. The insurance adjuster will be there to assess what his employer should pay you. It’s not the insurance adjuster’s job to assert your claim to the insurer- it’s yours.

Scenario 2: Should you return to find a partially burned home you will have to be prepared to demonstrate to the insurer why those partially damaged portions of your home should be rebuilt correctly and not just patched. I have seen numerous occasions where lines are drawn in the sand by the insurer when it comes to properly repairing partially burned homes. If you have significant partial damage and you feel that your home might be a total loss, you should push the issue with the insurer and be prepared to show why it’s not practical to repair your home.

Scenario 3: You return to find your home standing and looking pretty good from the outside, but enter to find an intense smell of smoke and some water damage from the fire departments wetting down the structure to save it. This will be prove to be a very tough claim for you as fires of this magnitude create smoke that is so intense it permeates every opening in the structure. You may discover that the insurer wishes to send out one of their vendors to “clean” the smoke from your home. While this can be effective in a limited number of cases with an isolated fire, it will likely not be effective in wildfire situation. Paper and fabric based products absorb the smoke smell and the odor will penetrate into your walls, insulation and attic. The only real cure is to remove these building products and replace them. You will have to be prepared to convince your insurer that this is necessary and that won’t be an easy task.

Finally, you have to consider your contents. If the contents are burned beyond recognition, your job will be to compile a list of contents that includes quantities, ages, and the cost to replace those items today. You will also have to prove ownership by providing pictures or other documents that actually demonstrate that you owned the items. Unfortunately it’s the insured’s job to prove what they owned and what those items are worth. If you return to find some contents only partially damaged then you will have to demonstrate why it’s proper to replace those items and not clean them.
Fire and smoke claims are challenging to say the least, and that is why it’s imperative for the policyholder to take the initiative on asserting and supporting their claim from the outset.

If you are a TWIA policy holder, you need to understand the new process that you will be facing when you make a claim. This new process brings back bad memories for me of a flow chart project back in college with a lot of “if then” statements included. In this flowchart I see numerous issues that the policyholder needs to pay close attention to. First, buyer beware if you should end up in front of an “expert panel” who will make a determination of whether your damage was from wind or flooding. Next, it appears that appraisals will become much more frequent. While I am a proponent of appraisals, it should not be used as a tool for parties to attempt to avoid legal liability. Third, I would never recommend that a policyholder take a premium discount of 10% in exchange for agreeing up front to be bound by binding arbitration. Circumstances vary in every claim, and limiting your remedies up front is not prudent. Lastly, the consumer now has only 60 days to dispute the amount of loss paid by TWIA if TWIA accept’s responsibility. In the midst of a catastrophe this is simply not enough time for an insured to truly assess the costs of damage. The link to the flowchart is below—let me know if it brings back bad college memories for you as well. #TWIA